Phone Bill: How much cash could cover it for life?

Free cell phone bill for life

In today’s world, just about everyone has a cell phone bill which they must pay. Often, this bill is due monthly. Cell phones have become a staple of modern day life, and this monthly cost can vary greatly from person-to-person, depending on the phone they’ve picked up (on contract) to the data plan they commit to.

Canadian Telecoms are Price Gougers

I consider myself fairly lucky to have been grandfathered into my 8 GB for $40 a month plan. The Canadian telecoms retain their oligopoly by devouring any smaller telecoms which appear on the scene. For example, Wind Mobile was fought over but ultimately sold to Shaw Communications and Manitoba Telecom was purchased by Bell, with the customers being split between Bell and Telus so that they could garner regulatory approval. And now in 2022, Rogers is attempting to acquire Shaw Communications for $26 billion. Thus, the average Canadian does not have any choice but to pick one of the Big 3 across the majority of Canada. As a result, consumers have been completed gouged over the years.

While it’s no fun being a victim of price gouging, you can ease the pain by participating in the stock market and purchasing some of these companies. The dividends received from owning these stocks can go towards your cell phone bill. Essentially, the money they’re gouging from you and your fellow Canadians, can be put back into your pocket to pay for that exact bill.

In other words, the cash you would receive in dividends from the Canadian telecommunications giants would nullify your cell phone bill. However, you have to save up a big chunk of money to invest in order to receive adequate cash flow to cover the phone bill.

Covering a $40 Phone Bill

With tax and fees included, a $40.00 phone bill comes out to $47.64 per month in 2022, which is $571.68 a year.

Telus pays a dividend of $1.31 per year. Thus, to cover that $571.68 annual phone bill, one would require 437 shares of Telus. At $33.33 a pop, it would cost me $14,565.21… That’s a lot of money, sure; but the investment value should grow as time goes on too. Therefore, you keep the cash and are rewarded with a paid off monthly phone bill.

If I was to attempt to cover this bill with a different telecom investment, such as Bell, it would cost a total of $10,974.60 to purchase 156 shares which would yield $574.08. Finally, if I were investing in Rogers, it would cost a total of $19,622.46 (much more!) to purchase 286 shares to yield $572.00. Additionally, the reason it costs so much more to cover your bill by investing in Rogers is due to it’s relatively low dividend yield of 2.9%, while Telus and Bell yield 3.9% and 5.2%, respectively.

Company Price Shares Cost Yield Dividend Return
Telus $33.33 437 $14,565.21 3.93% $1.31 $572.47
Bell $70.35 156 $10,974.60 5.23% $3.68 $574.08
Rogers $68.61 286 $19,622.46 2.92% $2.00 $572.00

Now that’s a lot of cash to save up – but the reward – covering your phone bill for the rest of your life, is well worth it. Like all other bills, investing for dividends is one great way to become financially independent – it’s simply interesting to achieve such a thing by investing in the same sector as your bill came from.

While it would cost that much to be able to cover a $40 cell phone bill outright, the number obviously varies depending on the bill. Nowadays, It’s not uncommon to have $100 cell phone bills either.

Covering a $100 Bill

For the sake of completeness, let’s look at how much it would cost to cover a $100 phone bill by receiving dividends from an investment for each of the Big 3 Telecoms.

Company Price Shares Cost Yield Dividend Return
Telus $33.33 917 $30,563.61 3.93% $1.31 $1,201.27
Bell $70.35 327 $23,004.45 5.23% $3.68 $1,203.36
Rogers $68.61 600 $41,166.00 2.92% $2.00 $1,200.00

Saving up $14,565 can be a lot easier than saving up $30,563 to invest in the stock market to generate enough dividends to pay off your phone bill. And, this is a great demonstration of how having your bills under control makes it a ton easier to achieve financial independence.

Well, there you have it – you now have the knowledge to calculate for your self exactly how much cash you need to bank to cover your phone bill. Also, the thing about investing to pay off your bills is – all your bills can function exactly like this. We just demonstrated a baseline cost for covering $100 in monthly bills. If your entire portfolio was to pay out the same yields as these telecoms then it’s some very simple math for you to find out right now what you’d need to achieve financial independence.

7 Replies to “Phone Bill: How much cash could cover it for life?”

  1. Hey love your articles. Read your updates every time. Keep up the good work!
    Your spreadsheet on the stockportfolio page is broken.

  2. Haha that’s exactly how I look at a lot of recurring expenses as well. I calculate the investment size needed in order to cover it in perpetuity. Often this helps decide if I shoukd even spend the money at all.

  3. Love the blog. Love these little articles that make me think and do calculations on my own situation. Just wanted to ask what is your opinion on having some money invested in GICs?. I personally have a percentage of my portfolio in GICs invested at 2% just in case the markets crash or something I would not be loosing as much sleep as I can survive by cashing the GICs instead of selling my stocks when they are in the negative.

    1. Welcome Faze, I’m glad to have an impact on you. About my opinion on GICs, well, I had about $5.5k in a GIC myself earlier this year which I took my money out of just because I wanted it as dry powder in case any stock market corrections and opportunities occured – but if it’s a small percentage of your portfolio I think it’s completely ok. The only thing to consider is the opportunity cost of having that money locked away for X years when it could potentially be put to better use.

  4. Awesome, I just did the *same* calculations last month for my cell phone, land line (I am old school), and DSL connection. I have investments set up to pay for all of those, for life, as well!

    One important benefit: typically high quality firms will increase their yields at a rate that exceeds inflation. Assuming your cell phone bill increases with inflation as well, you will always come out ahead: your dividend income stream will go up, theoretically, faster than any annual increases in your plan. This also leaves buffer to switch to a different plan in the future.

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